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Chart of the day: Metals pick up momentum

Shanghai steel rebar futures prices have been surprisingly subdued since we last wrote about them in mid-August, reflected in steady open interest. The contract looks set to spring into life, because of last week’s close above the top of a triangle consolidation and helped by other base metals that are currently booming. Over the summer, rebar futures held above the lower edge of the triangle consolidation and above the top of the trend channel that has dominated since 2011. Over the past four weeks, it was forced sharply higher by the steeply rising Ichimoku cloud. We continue to favour a rally through Fibonacci retracement resistance at 2,685 yuan per tonne to match this year’s high at 2,900 yuan, just under the psychological 3,000-yuan level.

Nicole Elliott is a technical analyst